Bahrain Fighting Moves from Roundabout to Villages

Manama's central financial district and the iconic Pearl Roundabout were quiet Wednesday night, despite earlier calls from opposition groups who said they planned to regain their presence there.

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Anti-government protestors open their arms in front of military vehicles near Pearl Square in Bahraini capital Manama, on March 16, 2011, after Bahraini police killed at least two protesters and wounded dozens more as they assaulted a peaceful protest camp in the capital's Pearl Square, an opposition party official said. AFP PHOTO/STR (Photo credit should read -/AFP/Getty Images)

Bahrain's defence forces have held the areas since mid-morning and a government-imposed curfew has now gone into effect, while earlier fighting between security forces and protestors moved to villages.

As police and military forces cleared the central square where protestors were concentrated, five people were reported dead and hundreds injured.

Earlier Wednesday, black smoke rose above the Pearl Roundabout, which is locked down by Bahrain security forces with tanks, bulldozers and armored vehicle on the sidelines. Saudi-led Gulf Coalition Council forces are on site at the roundabout, but not part of the action, witnesses told CNBC.

Bahrainis were being attacked and shooting broke out in the villages of Al Gedam and Ras Ruman. Military helicopters are still patrolling the skies.

In Hidd, Bahrain Defense Forces (BDF) are poised to quell any unrest, sources told CNBC. Troops wearing BDF uniforms stacked sandbags at the entrances to the the area and placed 50-caliber guns on top, aimed toward the town.

In the Busaiteen area, masked young men set up checkpoints along the roadways, stopping all traffic in and out of the area. Neighbors told CNBC that while it is impossible to really tell where these kids are coming from, it's an obvious effort to stop militia forces with weapons from coming into the area.

At least five protesters were killed, the head of the Shi'ite Muslim opposition bloc in parliament told Reuters. "This is a war of annihilation. This does not happen even in wars and this is not acceptable," Abdel Jalil Khalil, a senior politician in Bahrain's largest Shi'ite party Wefaq, said.

But the government said in a statement ony two police officers were killed, with no other injuries reported, and that security forces only used tear gas to disperse protestors after coming under attack from "saboteurs" with Molotov cocktails and guns.

The "convoy came under gunfire near Bahrain Mall. On the immediate approach to the ... roundabout, security forces came under attack from a group of around 250 saboteurs positioned on the fly-over directly adjacent to the roundabout, who hurled Molotov cocktails at the approaching security forces," the government said in a statement.

Upon "orders from the Minister of interior, police dispersed the saboteurs on the flyover using tear gas before withdrawing."

"Shortly after, police entered the roundabout area itself where retreating protestors set fire to a number of tents and waste bins before the arrival of police forces, resulting in the explosion of at least two heating gas-canister without injury," the government said.

"At no point in the operation were live rounds used," it added.

More Protests?

Opposition groups had vowed to defend their presence at the Pearl Roundabout and said they plan to stage nationwide rallies.

Bahrain 'Caught People by Surprise'

â??Lots of us are planning to move out (of Bahrain) within the next day,â? Douglas Hansen-Luke, CEO of Robeco Middle East, told CNBC. As the situation in Manama, Bahrain, deteriorates, the ex-pat business community doesn't feel safe any longer, he said.

The protests will denounce the recent deployment of a Saudi Arabia-led Gulf Co-operation Council (GCC) military force. On Thursday, a demonstration is planned at around 19.30 local time (12:30 New York time) outside the Television and Radio Authority building in Isa Town (Central governorate).

On Friday, protesters are due to assemble at around 15:00 local time at the Buri Roundabout in Manama before marching to the Bahraini Defense Forces camp in the Hamalah area.

Locals have set up medical centers in the Ras Raman, Sannabis and Karbabad because they have not been allowed to take their wounded to hospital, CNBC has learned. People are asking for blood donations and many have reportedly opened their homes to take care of the wounded.

Bahrain TV also announced a curfew from 4 pm to 4 am local time until further notice, in effect for a large area of central Manama, including the financial district and the Pearl Roundabout. Protest and demonstrations are banned.

Operations at Bahrain International Airport (BAH) have so far remained unaffected but reports indicate that the main highway to the facility has been closed by the security forces.

Earlier the BDF announced other possible measures, including plans to possibly evacuate certain areas and to inspect and detain suspects.

"The BDF urges full cooperation of citizens and residents to abide by these measures," the announcement said.

Protestors in the roundabout are "all gone," sources told CNBC. Saudi tanks had control of all bridges, which were either closed or "secured."

Earlier, shots were heard on the ground and a huge plume of black smoke rose near the area.

Tear gas was also used and both military and police were at the site. The military positioned itself to the north of the square with tanks, armored vehicles and bulldozers. Security forces in riot gear were seen securing the roundabout.

Bahrain's King Hamad al-Khalifa called for a three-month period of "national safety" Tuesday, as protestors continued to clash with security forcesthroughout mostly Shiite areas of the country.

Joseph Eid

Bahraini National guard arrest a man believed to be a journalist as he walked towards Pearl Square in the Bahraini capital Manama, on March 16, 2011, after Bahraini police killed three protesters and wounded dozens more as they assaulted a peaceful protest camp after dawn in the capital's Pearl Square, an opposition party official said. AFP PHOTO/JOSEPH EID (Photo credit should read JOSEPH EID/AFP/Getty Images)

The decree amounts to martial law, with businesses closing and moving employees either back to their country of origin or to Dubai. The U.S. embassy in Bahrain has advised all U.S. citizens to limit their movements and to leave home only for essential purposes.

Bahrain has been gripped by its worst unrest since the 1990s after protesters took to the streets last month, inspired by uprisings that toppled the leaders of Egypt and Tunisia.

Unlike those countries, where the mainly Sunni populations united against the regime, Bahrain is split along sectarian lines, raising the risk of a slide into civil conflict.

Over 60 percent of Bahrainis are Shi'ites who complain of discrimination at the hands of the Sunni royal family. Calls for the overthrow of the monarchy have alarmed the Sunni minority, which fears that unrest could serve non-Arab Shi'ite power Iran.

Iran, which sits across the Gulf from Bahrain, sharply criticized the decision to send in Saudi troops.

The United States, a close ally of both Bahrain and Saudi, said it was concerned about reports of growing sectarianism in the country, which is home to the U.S. Navy's Fifth Fleet, and called for political dialogue to resolve the crisis.

"One thing is clear, there is no military solution to the problems in Bahrain," said White House spokesman Tommy Vietor.

Bahrain asked the Gulf Cooperation Council to lend its support for policing purposes earlier this week; the government says the GCC force is only in the country to protect vital infrastructure such as oil, electricity and water buildings.

Middle East Turmoil

Guns are banned in Bahrain, leading many residents to speculate that the militias were in fact plain clothes security forces. Sources at the Royal Court rebutted such speculation, however, saying that anti-government protestors are armed and that the fighting has been between civilians only.

A banker who asked not to be identified said he feels the royal family and the government have clearly lost control, citing the Gulf Cooperation Council forces that were called in on Monday. He also said Bahrain's crown prince squandered the government's opportunity for a dialogue, failing to bring opposition parties to the table to start talks quickly.

Bahrain is expected to see its gross domestic product contract this year, partly as a result of the disruptions caused by protests.

- CNBC's Don Spain and Reuters contributed to this report

Contact Europe: Economy

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